EconomyFinancialChina displaces India as the largest supplier of cars...

China displaces India as the largest supplier of cars for Mexico

Mexico is the seventh largest producer of vehicles internationally, but it has also become a major importer of Chinese-made cars.

This year the Asian country surpassed India as Mexico’s largest supplier of vehicles thanks to the arrival of new Chinese brands and to the fact that some automakers, such as General Motors or Stellantis, have increased the sale of Chinese-made models.

Of the 778,527 new vehicles sold in Mexico between January and September of this year, 522,269 were imported ( 67.1% of the total) . And of this universe, 117,987 units are ‘made in China ( 22.6% of all imported models), according to data from the National Institute of Statistics and Geography (Inegi).

Guillermo Rosales, executive president of the Mexican Association of Automotive Distributors, believes that the growth in the share of cars imported from China is due to the fact that the Asian giant has enjoyed a better position in its supply chain this year.

The shortage of semiconductors caused that between January and September 2,129,650 vehicles were not assembled globally, of which 32% correspond to European manufacturing models, 23% from Japan and South Korea, and 22% to North American manufacturing models. (United States, Mexico and Canada). Only 2% corresponds to Chinese manufacturing models, according to the international consultancy IHS Markit.

Mexico has offset some of the volume that other plants have stopped supplying, including local plants, with Chinese models.

“There is a complementarity between the portfolio of products that we find in Chinese manufacturing, and that are also proving competitive, to complement the offer in the Mexican market,” Rosales told Expansión at a press conference earlier this month.

The largest importer of Chinese cars is…

The number of units shipped from China doubled in the last year: while between January and September of last year Mexico imported 50,802 units from that country, in the same period this year there are already 117,987 units.

In this period, General Motors positioned itself as “the great importer” of Chinese models, with 63% of the total units. The American manufacturer has imported and sold 74,438 units from the Asian country from January to September, among which some models such as Aveo, Onix, Cavalier, Groove, Captiva SUV, Tornado Van and the S10 pickup family stand out.

The proportion has increased in the last year. Of the 99,050 units sold by General Motors in Mexico during the first nine of 2021, only 39,435 were imported from China, which represented 39.8% of the total . But as the firm added new models from that country, the proportion already exceeded 60% so far this year.

The second largest importer was MG Motor -a brand owned by the Chinese company Saic-, which so far this year has positioned itself as the seventh best-selling brand in the country. With 33,204 vehicles sold in the first nine months of the year, the company accumulates a 4.3% market share.

AMDA currently places the MG5 compact sedan as the eighth most popular model among the more than 400 vehicles offered in the country, with 15,534 units sold in the first nine months of the year. All from China.

Other manufacturers, such as Stellantis, have also found economic benefits in cars imported from China. The automotive conglomerate sells models from this country under its Chrysler and Peugeot brands.

Dangerous competition?

Today there are six Chinese brands available in the Mexican market: Jac, Baic, Changan, JMC, MG, Chirey.

Francisco Cervantes, president of the Business Coordinating Council, considers that “the market is so big that there is something for everyone”.

“There are brands (European, Japanese, Korean or American) that are very well positioned, but Chinese brands are making an attempt,” he tells Expansión at the end of a conference within the framework of ExpoTransporte 2022 in Puebla.

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